Insights & Opinions

Belgium has a new Challenger Bank aion: time for an interview

Fri, 28 Feb 2020

Rik Coeckelbergs Founder and CEO The Banking Scene
Lies Van Hemelrijck Opinion Maker The Banking Scene

On February 28th, aion communicated the launch of a new Challenger Bank in Belgium. It will be a subscription-based model, focusing on transparency and superior digital services, going from ApplePay, Google Pay, finding the best rates for deposits as well as for loans, ETF investment solutions... They even have a butler service for any possible question (the demo was a chat for a consumer looking for a vegan restaurant in Brussels).

We had an interview with their Chief Commercial Officer Wojciech Sass.
Hello everyone, I’m here at the launch of a new challenger bank. This time it’s one in Belgium, quite exceptional I would say, as most of them started in Anglo-Saxon countries or Germany. Today (February 28) we are at the launch of aion, together with Wojciech (Sass, Chief Commercial Officer). Wojciech, could you briefly describe yourself for the audience?

Wojciech: “I’m the Chief Commercial Officer of aion and one of the founders who came with the idea 2 years ago. Now we are bringing this to the Belgian market.”

Very good. What I heard from the introduction beforehand, is that aion is an answer to the whole discussion of trust. What’s going wrong today in financial services according to you when we talk about trust?

Wojciech: “The main issue is that when you would look from the service perspective, it is positioned to the customers as a service which quite often seems for free, but in reality, it’s not. We, as customers, pay for everything, and quite often we are unaware.

The example I mention is that you put money in the bank, and you get 0,18% interest with fidelity, when you need money, it costs you 9% interest for the cash loan in the same bank. And that’s something that is in the long run not sustainable. That’s the key thing to be addressed in terms of trust — banks no longer are service institutions. In other industries, the service element is much stronger. Quite often, the recipe of the bank is: for any of your problems, here is my product, of my shelf, please take it.”

And you are going to provide an answer to that?

Wojciech: “Yes, we as aion, we want to introduce a subscription-based model. Subscriptions shall be the foundations of trust because, with a subscription, we promise to work for you solely as our customer and maximize value for you.

To do this we will deploy the best technologies, and the best services we came up with. That’s our recipe, which on one hand is a simplified ‘all-in subscription’: one price for all, and we do this with services which are cutting edge, that a human would not able to deliver. What I mean is that the branch clerk would not be capable to provide the level of quality that we can promise with the technologies we deploy.”

What makes you any different from challenger banks that have free accounts for a limited amount of services and a premium account with a lot of services included?

Wojciech: “The main difference is that we simplify things and boil it down to subscriptions. So one fee element, and it is all-you-can-eat. When you take overdraft up to 1000 euro, it is for free. When you transfer money to the UK, which is an FX transaction, it is for free. When you withdraw money from an Indian ATM, it is for free.

When you pay a subscription, you don’t have to worry about anything. And we go one step further: we maximize everything for you. We deploy technologies which help us to think ahead, to provide a solution before your problems arrive. We help to optimize your bills, we can maximize your deposits, we can help your asset management, … all that is within that simple, humble model of subscription.”

Cool! Now, Wojciech is not a Belgian name of course, and from what I understand, the roots of aion bank are in Poland. So, it must have been a very thought-through decision to come to Belgium. Why did you explicitly choose for Belgium?

Wojciech: “Yes. First, I would like to address that in our squads, it’s full of Belgian professionals, specialists, very strong managers, so when we came to a market like Belgium, in all our humbleness, we did our homework. We have 100 employees in the office in Belgium.

Why we chose Belgium? The first reason being that Brussels is the capital of Europe, and our bank must be a European challenger. It will not stop here in Brussels, but we’ll spread out from Brussels to other EU countries, and then to start in Belgium is very good.”

And then in every country again with a local team to make sure that it’s tailored to the local habits?

Wojciech: “The idea is we will tailor it, we have the offering which we believe will work with customers who are savvy to work with the subscription model, customers who really believe that it’s better to have hassle-free banking with one monthly subscription, without additional worries about your financial affairs.

Customers looking for this kind of service can come to us for banking, not only in Belgium but also in Germany and in other countries. So that’s how we reason. We don’t have the aspiration to be a universal, full fletched bank with 10% market share in Belgium. That’s the difference with the traditional banks.”

Yes, because for example the challenger banks, according to me they provide a universal service for all, which allows them to scale. They often forget the local details, the local elements that make a bank locally trusted as well.

Wojciech: “Yes, as for the challengers we believe that they provide what I call fragmentation. Compared to traditional banks, these challengers provide a chunk of the financial services, maybe 15% or 20%, usually around payments.

I started in 1995, the founder, Wojciech Sobieraj worked in the industry since the ’90s. As bankers, we believe that you need to be doing the relevant services for the country. We deeply analysed the market here, and we know, for instance, savings are important, so we developed DepoMax, a regulated savings account.

Trust me, it’s not the easiest product to develop. We did it especially for Belgium because 90% of the deposits gathered here are RSA’s. Whereas some other neo banks would just ignore it and go with the savings account, which is no tax advantage and will not be liked by Belgians.”

Or even provide a savings account from another bank through platforms like Raisin for instance.

Wojciech: “They could also do that. But we are into having the relevant service in the first place. Sometimes we will not customize, and sometimes, if we believe it is relevant for our core clients, we will.

Important to mention is that we are dynamic, we are working in agile, so for us, the time from idea to market is 4 weeks, which I believe is quite different from many financial institutions worldwide.”

When I was seeing the presentation, I was making a parallel with another initiative in Belgium which is called Cake, they build also tailored offerings etcetera, and better promotion, better deals, but they do this on the PSD2 rails. They didn’t apply for a banking licence; they just gather all the information from different banks and try to make the best out of it and provide personalized services.
Maybe 2 questions: are you ready for PSD2 and on the other hand: was it a very conscious choice to become a bank, knowing that PSD2 was coming, because you become more a data custodian, you have all the data yourself.

Wojciech: “So first of all: entrepreneurs make various choices. We respect the choices made by Cake.

PSD2 is at the centre of our bank. Security and Open Banking are concepts which are in the centre of what we invented. When I talked about maximization of datasets: initially when we had this best deposit rate for you, although it comes from other banks, we replicated it in our books, because technically today in Belgium you cannot leverage the PSD2 to open deposits in the bank where the deposit accounts from.

But we are going to do it, we are going to do it in 6 months, we will be ready with that at the bank. We are very Open Banking centred, we are big believers that, unlike traditional models, you must be able to show the customers all the possibilities, guide him to the best option, and leave him in control.

In our model, the customer sees it all, presses the button, authorizes, and then we execute for him. That’s how we reason, that’s why it’s very open banking I believe in a friendly manner. We are big believers that people will not be willing to go to heavy ecosystems, and have the complication of ecosystems, making my choice more difficult than easier. We believe that Open Banking does not mean to give more complications to the customer.”

Thank you very much and best of luck!
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